Research Summary
The report presents an interview with Sam Kazemian, the founder of Frax, discussing the company’s plans, its unique structure, and its future projects. Topics covered include Frax’s intention to back its stablecoin with yield-bearing assets, the potential impact of a T-Bill backed Frax stablecoin, and the intersection of AI and crypto. The report also delves into the technical aspects of Frax’s operations, its team, and its future plans.
Key Takeaways
Frax’s Unique Structure and Future Plans
- Stablecoin Maximalist: Sam Kazemian, the founder of Frax, considers himself a stablecoin maximalist and believes stablecoins are the most useful cryptocurrencies for currency usage. Frax and Dai are currently the largest decentralized stablecoins.
- Frax’s Team and Structure: The Frax team consists of highly technical individuals with expertise in multiple areas. The team follows a unique structure where everyone is capable of reading and writing smart contracts, allowing for efficient development and auditing processes.
- Frax’s Future Plans: Frax aims to dominate the crypto space and be present in various aspects of the industry. The team plans to potentially increase the core development team by two to three people in the next six to nine months.
Frax’s Technical Aspects
- Frax’s Protocol: Frax offers a dollar-pegged stablecoin and an LSD, providing increased usage for its LSD, leverage, and debt denominated in its stablecoin. Frax is able to earn three layers of fees: collateral fees, protocol fees, and interest rate fees.
- Frax’s Stablecoin: Frax has a specific focus on being able to issue its stablecoin across multiple networks without relying on other bridges. Frax and frxETH are the only valuable assets on Fantom due to the multi-chain blow-up.
- Frax’s Real-World Asset Strategy: Frax is actively working towards obtaining an FMA and partnering with banking systems to hold risk-free rate FDIC insured assets. Frax aims to execute a real-world asset strategy and have non-defaultable assets in a matter of days.
Frax’s Future Projects
- Frax ETH: Frax ETH offers higher yield than its competitors like stETH and rETH. Frax ETH has a two-token system, with frxETH not earning any yield and staked Frax ETH (sfrxETH) earning all the POS yields.
- Frax’s Upcoming Developments: The priorities for the protocol in the next 6 to 12 months include the release of frxETH v2, which aims to decentralize validators, and Frax v3, a dollar-pegged stablecoin with a unique distribution system for yield.
- FraxChain: FraxChain is not an appchain but an entirely new ecosystem that provides developers access to the best interest rate yields. FraxChain’s layer-two solution will enable low gas transference of Frax, facilitating real-life use in credit cards and other spending.
Actionable Insights
- Explore the Potential of Stablecoins: Given Sam Kazemian’s belief in the utility of stablecoins, it may be beneficial to explore the potential of stablecoins in the crypto market.
- Consider the Benefits of a Unique Team Structure: Frax’s unique team structure, where everyone is capable of reading and writing smart contracts, may offer insights into efficient development and auditing processes.
- Investigate the Advantages of Frax’s Protocol: Frax’s protocol, which offers a dollar-pegged stablecoin and an LSD, may provide increased usage for its LSD, leverage, and debt denominated in its stablecoin.
